Railway outlines 2014 financial guidance
TORONTO,
Dec. 10, 2013 /CNW Telbec/ -
Claude Mongeau, president and chief
executive officer of CN (TSX: CNR) (NYSE: CNI), will review the
company's plans to deepen its agenda of Operational and Service
Excellence and become a true supply chain enabler at a two-day
meeting with the investment community starting here today.
"CN's agenda is gaining momentum," Mongeau said.
"We are building on a strong foundation of Operational and Service
Excellence, with an end-to-end supply chain approach that is
helping our customers win in their markets. Our focus on efficiency
and profitable growth continues to drive solid shareholder
value."
In addition to Mongeau's overview of CN's
business strategy, the company's leadership team will discuss CN's
plans to grow the top line at low incremental cost and invest in
the railway to support its agenda. The investment community heard
today from CN's safety experts about how the railway's initiatives
involving people, process, technology and investment are supporting
continuous improvement in safety.
CN today updated its 2013 financial outlook and
issued guidance for 2014, based on a number of assumptions,
including continued economic recovery:
2013 Updated outlook (1) - CN
expects to deliver 2013 adjusted diluted earnings per share (EPS)
in the range of C$3.05 to C$3.10 and
2013 free cash flow before dividends in the range of C$1.5 billion to C$1.6 billion. The mid-point of
the 2013 EPS range is consistent with CN's initial target of
achieving high single-digit adjusted diluted EPS growth in 2013,
compared with 2012's adjusted diluted EPS of C$2.81 (also adjusted to reflect the stock split
effective Dec. 2, 2013).
2014 Guidance (1) - With its
unfolding business strategy, CN is aiming to deliver double-digit
EPS growth in 2014 over the mid-point of its updated adjusted
diluted 2013 EPS guidance of between C$3.05
and C$3.10, as well as 2014 free cash flow before dividends
of about C$1.6 billion to C$1.7
billion. CN is also planning for 2014 capital expenditures
of approximately C$2.1 billion,
compared with an expected C$2.0
billion in 2013.
CN's schedule of webcast presentations and
speakers' slides are available at www.cn.ca/investors.
Forward-Looking Statements
Certain information included in this news release constitutes
"forward-looking statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and under Canadian securities laws.
CN cautions that, by their nature, these forward-looking statements
involve risks, uncertainties and assumptions. The Company cautions
that its assumptions may not materialize and that current economic
conditions render such assumptions, although reasonable at the time
they were made, subject to greater uncertainty. Such
forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results or performance of the
Company or the rail industry to be materially different from the
outlook or any future results or performance implied by such
statements. To the extent that CN has provided guidance that are
non-GAAP financial measures, the Company may not be able to provide
a reconciliation to the GAAP measures, due to unknown variables and
uncertainty related to future results. Key assumptions used in
determining forward-looking information are set forth below.
2013 key assumptions
CN expects to deliver 2013 adjusted diluted earnings per share
in the range of C$3.05 to C$3.10, the
mid-point of which is consistent with CN's 2013 financial outlook
issued on Jan. 22, 2013. CN plans to
invest approximately C$2 billion in
capital programs in 2013, which it revised upward from C$1.9 billion on April 22,
2013. Approximately C$1.1
billion of the total expenditure will be targeted on track
infrastructure to maintain a safe and fluid railway network. In
addition, the Company will invest in projects to support a number
of productivity and growth initiatives.
CN has made a number of economic and market assumptions in
preparing its 2013 outlook. The Company is forecasting that North
American industrial production for the year will increase by about
two per cent. CN also expects U.S. housing starts to be
approximately 950,000 units, and U.S. motor vehicles sales to be
approximately 15 million units. In addition, for the 2013/2014 crop
year, CN is now assuming Canadian grain production will be well
above the five-year average and that U.S. grain production will be
above the five-year average. With these assumptions, CN assumes
carload growth of two to three per cent, along with continued
pricing improvement above inflation. CN assumes the Canadian-U.S.
exchange rate to be in the range of C$0.95-C$1.00 for 2013, and that the price of
crude oil (West Texas Intermediate) for the year to be in the range
of US$90-$100 per barrel.
2014 key assumptions
CN has made a number of economic and market assumptions in
preparing its 2014 outlook. The Company is forecasting that North
American industrial production for the year will increase by about
three per cent. CN also expects U.S. housing starts to be in the
range of 1.1 million units and U.S. motor vehicles sales to be
approximately 16 million units. In addition, CN is assuming a U.S.
2013/2014 grain crop above the five-year average, a Canadian
2013/2014 grain crop well above the five-year average, and
2014/2015 grain crops in both countries in-line with the five-year
average. With these assumptions, CN assumes mid-single digit
carload growth, along with continued pricing improvement above
inflation. CN also assumes a Canadian-U.S. exchange rate of
approximately C$0.95 and the price of
crude oil (West Texas
Intermediate) to be in the range of US$95-$105 per barrel. In 2014, CN plans to
invest approximately C$2.1 billion in
capital programs, of which more than C$1.1
billion will be targeted on track infrastructure to maintain
a safe and fluid railway network. In addition, the Company will
invest in projects to support a number of productivity and growth
initiatives.
Important risk factors that could affect the
forward-looking statements include, but are not limited to, the
effects of general economic and business conditions, industry
competition, inflation, currency and interest rate fluctuations,
changes in fuel prices, legislative and/or regulatory developments,
compliance with environmental laws and regulations, actions by
regulators, various events which could disrupt operations,
including natural events such as severe weather, droughts, floods
and earthquakes, labor negotiations and disruptions, environmental
claims, uncertainties of investigations, proceedings or other types
of claims and litigation, risks and liabilities arising from
derailments, and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the
United States. Reference should be made to "Management's
Discussion and Analysis" in CN's annual and interim reports, Annual
Information Form and Form 40-F filed with Canadian and U.S.
securities regulators, available on CN's website, for a summary of
major risk factors.
CN assumes no obligation to update or revise
forward-looking statements to reflect future events, changes in
circumstances, or changes in beliefs, unless required by applicable
Canadian securities laws. In the event CN does update any
forward-looking statement, no inference should be made that CN will
make additional updates with respect to that statement, related
matters, or any other forward-looking statement.
1) |
See Forward-Looking statements for a summary of the key
assumptions and risks regarding CN's 2013 and 2014 outlooks. |
CN is a true backbone of the economy,
transporting approximately C$250
billion worth of goods annually for a wide range of business
sectors, ranging from resource products to manufactured products to
consumer goods, across a rail network spanning Canada and mid-America. CN - Canadian National
Railway Company, along with its operating railway subsidiaries --
serves the cities and ports of Vancouver, Prince
Rupert, B.C., Montreal,
Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of
Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth,
Minn./Superior, Wis., and
Jackson, Miss., with connections
to all points in North America.
For more information on CN, visit the company's website at
www.cn.ca.
SOURCE CN